Emerging markets weaken for second day; Egypt widens; Medco Energi, 21Vianet price notes

By Rebecca Melvin

New York, Aug. 10 – Emerging markets were weak for a second straight day on Thursday against a backdrop of lower global markets as safe-haven assets like U.S. Treasuries rose again over fears tied to bellicose rhetoric between the United States and North Korea.

“The market is pretty heavy and well offered,” a London-based EM-focused trader said via email. Spreads widened out for many regions, with Egypt sovereign credit widening an outsized 12 to 14 basis points, while Oman widened 5 bps, and Qatar was wider by 3 bps to 5 bps.

Exchange-traded funds were also being sold. iShares J.P. Morgan $ Emerging Markets Bond ETF moved lower by $0.48, 0.42%, to $114.76 on Thursday and was also down on Wednesday from a high market of about $115.56 early in the session.

In the primary market, a couple of Asian markets were priced, but other regions were quiet. Indonesia oil company PT Medco Energi Internasional Tbk. priced $300 million of 8½% eight-year notes to yield 8¾%. The notes priced tighter than initial talk for a yield of 8 7/8%.

Also pricing on Thursday was China internet services provider 21Vianet Group Inc., which priced $200 million of three-year notes at an interest rate of 7%.

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